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GSE plans unveiled; NC CUs merge; JPMorgan cautions on stablecoins

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GSE plans unveiled; NC CUs merge; JPMorgan cautions on stablecoins

The Treasury Department and the Department of Housing and Urban Development have unveiled their respective proposals to recapitalize Freddie Mac and Fannie Mae before ending their conservatorships. The two regulators said the Federal Housing Finance Agency can implement its own reforms "in the absence of further Congressional action." The Treasury document provides 49 total recommendations that the FHFA or Congress should take to reform the U.S. housing finance system.

The Financial Accounting Standards Board is proposing a temporary guidance to ease the transition of companies from the London Interbank Offered Rate and other interbank offered rates. In its temporary guidance, the FASB is proposing to simplify accounting evaluations for contract modifications if certain criteria are met. It is also proposing to preserve hedge accounting when a contract is modified and during the temporary transition period, with any hedge breakage or mismatch being visible in the financial statements.

In Maryland, BV Financial Inc. (MHC) agreed to acquire MB Bancorp Inc. and its unit Madison Bank of Maryland in an all-cash transaction. Under the terms of deal, MB Bancorp shareholders will receive $15.85 for each share of MB Bancorp, representing aggregate consideration of about $31.0 million. Upon completion of the deal, which is expected in the first quarter of 2020, BV Financial unit BayVanguard Bank (MHC) will have approximately $400 million in assets and 10 branch locations.

Winston-Salem, N.C.-based Hanesbrands CU merged into Members CU on Aug. 31. As of June 30, Members CU had assets of $292.5 million, while Hanesbrands CU had assets of $42.7 million, according to S&P Global Market Intelligence data.

Charles Schwab Corp. is shutting down its Singapore unit, Charles Schwab Singapore Pte. Ltd. Charles Schwab Singapore started operations in November 2017.

Fintech startup Stripe Inc. will start lending to businesses that are already its clients. The San Francisco-based company launched Stripe Capital Sept. 5 to start lending amounts of about $10,000 to $20,000, Bloomberg News reports.

The New York State Department of Financial Services approved Paxos Trust Co. LLC to offer a gold-backed virtual currency, called PAX Gold, the first such virtual currency authorized by DFS, as well as BUSD, a virtual currency pegged to the U.S. dollar.

JPMorgan Chase & Co. said stablecoins, a class of cryptocurrencies designed to maintain a stable value, might not be able to weather times of stress, Bloomberg News reports. Analysts at the banking giant warn that the coins, like Facebook's Libra, lack the liquidity facilities present in other payments systems. While transactional activity tied to the stablecoins may grow, their current design may not be able to support those activities.

In other parts of the world

Asia-Pacific: Axa mulls sale of Malaysian JVs; China opens interbank FX market to 3 brokerages

Europe: Brexit saga continues; Novo Banco could face €106M loss; Sweden holds rate

Middle East & Africa: FirstRand posts results; Sanlam targets Egypt; Ghana sees room for policy easing

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East Coast banks buckle up for hurricane season as Dorian hits Carolinas: Hurricane season has begun for U.S. banks on the Eastern Seaboard, as Hurricane Dorian, the first major hurricane this year, travels up the Carolina coastlines.

Uneasy economic outlook has US bank sellers thinking 'now or never': An uneasy economic outlook could have more banks looking to sell. At Raymond James Financial Inc.'s U.S. Bank Conference in Chicago, bankers said they expect potential stock market volatility and a tough operating environment could convince more banks to look for a sale.

Global i-banks' H1 revenues fall to lowest level since 2006: The world's 12 largest investment banks posted combined revenues of $76.8 billion in the six months to June-end, their lowest aggregate first-half results since 2006, according to the latest sector index released by business intelligence firm Coalition.

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.
In Asia, the Hang Seng rose 0.66% to 26,690.76, and the Nikkei 225 rose 0.54% to 21,199.57.
In Europe, around midday, the FTSE 100 was down 0.8% to 7,265.62, and the Euronext 100 was down 0.18% to 1,080.49.

On the macro front

The employment situation report, the quarterly services survey and the Baker-Hughes Rig Count report are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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